Want to bring real estate prices down? Build more units. That’s the simple thesis of Vancouver’s so-called “Condo King.”
And yes, the man behind Rennie Marketing Systems knows the first question he’ll get is ‘Why should we listen to a real estate marketer who tells us the solution is more of what he’s selling?’
“I’ve done this for 14 years. The last thing Bob needs is another development to sell. I have a very sustainable business. But we have the data.”
LISTEN: Guest host Shane Foxman and Bob Rennie talk supply and demand in Vancouver real estate.
Rennie says if you think demand is bad now, give it a few years.
He says a wave of baby boomers is getting ready to sell their homes, downsize, and pass the cash on to their kids.
“They have 193,000 clear title homes. Almost one in three homes throughout Greater Vancouver is clear title owned by somebody over 55, and they are sitting on $197 billion dollars. So if $10 billion dollars is wealth transfer to the kids in the next few years that’s $40 billion in buying capital.”
On the other side of the equation, Rennie says we’re simply out of room for new houses, and that Vancouver proper will never see a new single family home.
“Over cooked, done. We’re out. There’s no single family sites left. We have this addiction in Vancouver to hanging on to this single family home lifestyle. Its wonderful, but its 56% of our land.”
One answer: build up. He says density is politically unpopular, and a favourite target of neighbourhood groups; but he says if you want to stay in Vancouver it’s the only way.
“If you have a no towers sign on your lawn, you have no right to talk to your children about affordability in the city. Because we can only solve it with supply. … We can have lower density or lower prices. We’re not entitled to both.”
Alternatively, he says people need to start looking outward into the region. He says of the more than 3,000 homes sold in Vancouver last year, just 26 went for under $750,000… while in the surrounding municipalities more than 10,000 came in under that price.
But that dream, Rennie says, won’t fly without some major new investments in infrastructure.
“It’s all going to be solved in the region, but none of it can be solved without transit.”